A recent study alleges California’s direction of substantial federal tax funds towards healthcare for undocumented immigrants.
This was claimed in a research by EPIC and the Paragon Health Institute connecting California’s Medicaid provider taxes to approximately $4 billion in apparent state funding for undocumented immigrants’ healthcare and related programmes, though EPIC indicates this money originates from federal reimbursements.
“They are exploiting an existing loophole within law,” Paul Winfree, president and CEO of the Economic Policy Innovation Center (EPIC), told Fox News Digital. “States can do these provider taxes to funnel money back to the state, that they are then using to pay for, to put illegal immigrants on Medicaid. That’s quite literally what’s going on,” he said.
Current legislation requires states to match Medicaid provider taxes with equivalent payments, with the federal government providing 60% matching funds to assist states with Medicaid expenses.
“Medicaid spending is supposed to be jointly financed by the federal government and states. However, states are increasingly designing Medicaid money laundering schemes that result in massive federal expenditures without any state financial obligation,” the paper said.
“The state of California, colluding with insurance companies who cover Medicaid beneficiaries, has created one of the most outrageous ones yet, a money laundering scheme that results in California obtaining more than $19 billion in federal money without any state contribution over the period from April 2023 through December 2026” it added.
The document also noted these funds were “used to implement major expansions in the Medicaid program to fund illegal immigrants and long-term care (LTC) for the wealthy.” “This scheme enriches insurers, attracts illegal immigrants to the United States, and adds mountains to the federal debt, all at the expense of working Americans,” it said.
Closing this provider tax loophole could save up to $630 billion, according to Winfree, as Republicans pursue significant budget savings through reconciliation.
